GBPAUD Trade Idea
AUD has been weaker against the pound given the nosedive in risky assets and the Chinese growth downgrade narrative. The pound doesn’t fare much better to be honest with a very difficult economic environment fast approaching. Additionally, rates pricing for the BoE’s bank rate is too aggressive. Lastly, Brexit news is beginning to ramp up again. This could easily see this cross roll over lower.
The 4-hour chart shows price is currently fluctuating in a range between 1.785 and 1.718/1.72. Price is currently rebounding off the daily 23.6% Fibonacci level. Not too far below there we have the key 50-day and 200-day SMAs. The RSI is trying to bounce off the 60 level with some room before we get near the overbought boundary again. One could play this both ways with longs targeting 1.785 and shorts targeting the 50-day/200-day SMA after a break of the 1.765.
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